Cayman charities need to use their heads as well as their hearts when giving money to developing countries hit by disasters, a top compliance officer told a symposium aimed at informing non-profit leaders.
Nadine Hayle, the head of compliance at Dart and director of Special Olympics Cayman Islands, highlighted that some Cayman charities contribute to work in developing countries, such as Haiti, Cuba and Nicaragua.
“How do we give in a way that we still protect ourselves?” she said at the R3 Foundation symposium, ‘Strengthening NPO Integrity’, on 14 May.
“You have to do the due diligence with who you are sending the funds to. Everyone has different types of risk in their organisations.
“If you see that you don’t understand the risk, ask for help.”
When giving to Cuba, for example, US sanctions have complicated the donation process because of correspondent banking arrangements.
She added that a failure to be thorough could lead to unintended consequences and cash ending up in the wrong hands.
“If someone is asking you to send some funds somewhere, ask the questions before you send money across,” Hayle said.
She warned that increased use of crypto-currency and crowdfunding on social media could present new potential dangers for non-profits.
But she said that Cayman was lucky because it has a wealth of expertise in the financial sector that non-profits could draw on, and not just in the area of anti-money laundering.
Hayle added, “Understand your risk, but if you need help, ask. If you don’t understand what the risk is, still ask because somebody will help.”
Ben Evans, an expert in NPO regulations and a director of UK consultancy Greenacre Associates, said that terrorist financing involving the non-profit sector was rare, but possible.
He told attendees at the event, held in the Hotel Indigo in George Town, “You need to make sure you keep that in mind. It’s a rare crime. It is unusual, but it has a huge impact.”
Evans added there was some evidence that non-governmental organisations and non-profits had been used in the wake of the 9-11 terror attack in 2001 on the World Trade Center in New York to funnel funds to Al-Qaeda.
“Some of you will have some exposure to risk,” he said. “Be aware and take appropriate actions to prevent these kinds of risks.”
He added that measures taken to prevent theft and fraud would also protect against terrorism involvement.
“It’s making sure no one is using your name or organisation to undertake things they shouldn’t be doing,” he said.
“It really varies depending on the organisation. … It’s not necessarily just about money and assets.
“It can be intangible things, like using premises, websites or names.”
Evans said, “The real message to take away from this is you have to understand your own organisation and your own risks and do the right thing for you.”
The R3 Cayman Foundation was founded by Ken Dart in the wake of the COVID-19 pandemic. The Kenneth B. Dart Foundation has contributed $8 million in donations and matching pledges to R3.
Editor’s note: Compass Media is a subsidiary of Dart Media and Entertainment.